Baylis,, Smith and

d Owens: T
The Globa
alization of World Pol itics 6e
Re
evision guiide
C
Chapter 16
6: International polittical economy in an
n age of gllobalizatio
on

Immediately after the Second

S
Wo
orld War international institutionns were cre
eated to
faccilitate coop
peration in
n the world economy..

The onset of the cold war

w postpon
ned the op
peration of these instiitutions, as
s the USA
ste
epped in directly to manage
m
the
e reconstru
uction of Eu
urope and the interna
ational
mo
onetary sysstem based
d on the do
ollar.

The Bretton Woods

W
sys
stem of ma
anaged exc
change rattes and ca pital flows operated
unttil its breakkdown in 1971, when
n the USA announced
d it would nno longer convert
c
the
e dollar to gold.
g

w
marke
ed by a lackk of interna
ational eco
onomic coooperation among
a
the
The 1970s were
dustrialized
d countries, which flo ated their exchange rates and indulged in
n new
ind
forrms of trade protectio
onism.

De
eveloping countries
c
dissatisfact
d
tion with th
he internatiional systeem came to
o a head
in tthe 1970s when they
y pushed u
unsuccessffully for a new
n
internaational eco
onomic
ord
der.

Tra
ade negotiations werre broaden
ned to inclu
ude many new
n
areas,, but this le
ed to later
ressistance fro
om emerging econom
mies.

In 2
2007 a pow
wer shift became mo
ore obvious
s in the glo
obal econoomy, with emerging
e
eco
onomies such as China and Ind
dia playing
g a more prominent ro
role in nego
otiations
in ttrade, finan
nce, and developmen
nt assistan
nce, and in the G20 fo
formed afte
er the
200
08 financia
al crisis.

Ra
ational choiice explain
ns outcome
es in IPE as
a the result of actorss choices, which are
asssumed alw
ways to be rationally p
power or utility
u
maxim
mizing withhin given particular
inccentives an
nd institutio
onal constrraints.

Oxford Universityy Press, 2014.

Baylis,, Smith and

d Owens: T
The Globa
alization of World Pol itics 6e
Re
evision guiide

Insstitutionalissts apply ra
ational cho
oice to state
es in their interactionns with othe
er states
in o
order to exxplain interrnational co
ooperation
n in econom
mic affairs.

Co
onstructivisst approach
hes pay mo
ore attentio
on to how governme nts, states
s, and
oth
her actors construct
c
their
t
preferrences, hig
ghlighting the role of identities, beliefs,
traditions, an
nd values in
n this proce
ess.

Ne
eo-Gramsccians highlight that acctors define
e and pursue their intterests within a
structure of id
deas, cultu
ure, and kn
nowledge, which itsellf is shapedd by hegem
monic
pow
wers.

Globalization
n is used to
t describe
e the effectts of several differentt drivers off change.

Inte
ernationaliization is worth
w
distin
nguishing from liberallization. Thhe former refers
r
to
inccreasing ecconomic tra
ansactionss across bo
orders, while the latteer refers to
o
govvernmentss policies which
w
prom
mote this activity.

Wh
hile techno
ology has transformed
n be done globally, thhe
d what can
detterritorializzation it cre
eates spurss both glob
balization and
a anti-gloobalization
n
nettworks.

Insstitutionalissts argue th
hat interna
ational institutions will play an im
mportant and
possitive role in ensuring
g that glob alization re
esults in widely spreaad benefits
s in the
wo
orld econom
my.

Re
ealists and neo-realists reject th
he institutio
onalist argu
ument on tthe grounds that it
doe
es not acccount for the unwilling
gness of sttates ever to
t sacrificee power relative to
oth
her states.

Co
onstructivissts pay morre attention
n to how governments, states, and other actors
con
nstruct the
eir preferen
nces, highliighting the
e role that state
s
identiities, domin
nant
beliefs, and ongoing
o
de
ebates and
d contestation plays in this proccess.

Oxford Universityy Press, 2014.